Hoping bigger is better, as well as more competitive, Extreme Networks announced it is buying Enterasys in a bid to rival networking giants such as Cisco Systems.
Extreme Networks will pay $180 million in cash in exchange for all outstanding shares of Enterasys in a transaction slated to close in the fourth quarter of this year.
Both companies provide networking switching in the enterprise, data center and cloud.
Enterasys, a 2000 spinoff of Cabletron Systems, supplies routers, switches, Wi-Fi gateways and related security and management software. It recently provided its IdentiFi technology and OneFabric Control Center management for a new, public Wi-Fi network at Lincoln Financial Field, home of the National Football League's Philadelphia Eagles.
Enterasys was acquired by The Gores Group and Tennebaum Capital Partners in 2005 and is a Siemens Enterprise Communications company, which, in turn, is a joint venture of The Gores Group and Siemens AG.
According to The VAR Guy, Extreme's technologies are broader than Enterasys' and incorporate open fabric to software-defined networking (SDN) and beyond.
Enterasys has about 900 employees and $330 million in annual revenues. Combining Extreme and Enterasys will create a company whose revenues will be about double the sales of either company alone.
"Significantly increased scale is expected to enable greater investments in R&D to accelerate innovation and bring better technologies and products to market faster. It is also planned that the operating margin of the combined company will increase over time as synergies are realized," said the companies.
"The combination of Extreme Networks and Enterasys is significant in that it brings together two companies with distinct strengths addressing the key areas of the network, from unified wired and wireless edge, to the enterprise core, to the data center and cloud," said Zeus Kerravala, principal analyst and president of ZK Research.
Enterasys scores Philadelphia Eagles stadium Wi-Fi deal
NFL on stadium Wi-Fi: 'Technology just isn't where it needs to be'
San Francisco 49ers Wi-Fi network will enable 68,500 fans to connect at once
Ericsson aims to score with Wi-Fi for stadiums
NFL adding free Wi-Fi to stadium experience